But what’s the alternative? Some libertarians argue that we should eliminate the dozens of Washington programs and replace them with a government-guaranteed minimum income. I address this issue in an essay for Libertarianism.org.

Some libertarians argue that the state should provide a minimum basic income, mainly because this approach would be preferable to the costly and bureaucratic amalgamation of redistribution programs that currently exist. It’s hard to disagree with the notion that the current system is a failure. The Cato Institute’s Michael Tanner has produced a searing indictment of the modern welfare state, pointing out that more than $1 trillion is spent every year on redistribution programs for the ostensible purpose of alleviating economic hardship, yet (or more likely as a result) the poverty rate is at an all-time high. Perhaps one reason poverty remains high is that such programs make leisure more attractive than work, as painstakingly illustrated in a study produced by Tanner and Charles Hughes. Moreover, welfare programs create very high implicit marginal tax rates, making it very difficult for poor people to improve their living standards by engaging in additional productive behavior. It’s almost as if the system was designed to create permanent dependency.

In other words, it seems that nothing could be worse than the current system. And if you want more evidence, here’s a very powerful video on the failure of the modern welfare state.

But what about the idea of trashing what we have today and instead offering everyone some sort of basic income? As I noted in my essay, there are “…some very iconic libertarian figures who support at least some version of their approach, including Milton Friedman, Friedrich Hayek, and Charles Murray.”

I agree, but only sort of. I like the idea of radical reform, but I think there’s a better road to Rome. It’s called federalism.

The bottom line for advocates is that anything would be better than the current system, so why not try something new? They’re right, but there’s actually a better way of approaching the issue. Why not take all income-redistribution programs, put them into a single block grant, and then transfer the money – and responsibility – to state governments?

Here’s my argument for decentralization and federalism.

In an ideal world, the block grant would gradually diminish so that states would be responsible for both the collection and disbursement of all monies related to welfare. But that’s a secondary issue. The main benefit of this federalist approach is that you stop the Washington-driven expansion of the welfare state and you trigger the creation of 50 separate experiments on how best to provide a safety net. Some states might choose a basic income. Others might retain something very similar to the current system. Others might try a workfare-based approach, while some could dream up new ideas that wouldn’t stand a chance in a one-size-fits-all system run out of Washington, DC. And as states adopted different systems, they could learn from each other about what works and what doesn’t work. And since it’s easier to influence decisions that are closer to home, taxpayers at the state level almost certainly would have more ability to impact what happens with their money.

And here’s the bottom line on why a federalist approach is the libertarian solution to the welfare state.

It also will satisfy the libertarian desire to get Washington out of the business of income distribution, while presumably producing a system that actually does a better job of helping the less fortunate escape government dependency. In other words, all the advantages of the basic income plan without the potential system-wide downsides.

By the way, I explain in the article that the 1996 welfare reform legislation was a test case for the decentralization model. The analogy isn’t perfect, I admit, but there’s a very strong case to be made that replacing the federal welfare entitlement with a block grant was good for taxpayers and good for the poor…and that it shows why states do a better job of dealing with redistribution than Washington.

Last but not least, I’m just a policy wonk, but I think the federalism strategy also has political appeal. As just noted, it worked with welfare reform. And I suspect a lot of non-libertarians and non-conservatives will intuitively understand that you’ll get better results if you allow diversity and experimentation at the state level.

P.S. There would be some bad news if we decentralized the welfare state. It could mean an end to the Moocher Hall of Fame.

P.P.S. Replacing the welfare state with a (hopefully shrinking) block grant only addresses the problem of “means-tested” programs. If you also want to solve the problem of old-age entitlements, that requires Medicare reform and Social Security reform.

[…] sympathetic to the latter approach, but my view is that welfare programs should be designed and financed by state and local governments. We’re far more likely to see innovation as policy makers in […]

[…] sympathetic to the latter approach, but my view is that welfare programs should be designed and financed by state and local governments. We’re far more likely to see innovation as policymakers in […]

[…] sympathetic to the latter approach, but my view is that welfare programs should be designed and financed by state and local governments. We’re far more likely to see innovation as policy makers in […]

[…] interview with Dana Loesch, I make several points about the Trump budget, including the need to reform means-tested entitlements and Obamacare (with a caveat from my Second Theorem of government), as well as some comments on […]

[…] we have a very simple solution to this mess. Just get the federal government out of the business of redistributing income. We already got very good results by reforming one welfare program in the […]

[…] is why the most prudent and effective step is to simply get the federal government out of the business of redistributing income and let state and local governments decide how best to deal with the […]

[…] is why the most prudent and effective step is to simply get the federal government out of the business of redistributing income and let state and local governments decide how best to deal with the […]

[…] year on means-tested (i.e., anti-poverty) programs, which is about one-fourth of total outlays, so getting Washington out of the business of income redistribution would substantially lower the burden of federal spending (somewhat offset, to be sure, by increases […]

[…] it’s equally important to decentralize so that local and regional governments are responsible for redistribution programs. Under such an approach, I suspect we’d be far more likely to see the imposition of standards […]

Govt is govt when it comes to citizens getting the shaft…just go and analyze state and local govt CAFR’s. Replacing the income tax with a sales tax, and implementing a real Democracy are all doable now, but won’t be done because those that favor keeping power with govt, whether at the Federal or State level, will continue to dig in their heels, instead of going quietly into the night.

in the off chance that libertarians start getting elected to public office… they would need a realistic plan to transition back to constitutional governance… block grants could well be a part of that plan… what is amazing here is that liberal governmental policy harms the working poor and the economically disadvantaged most… democrat tax and energy policy will raise the cost of goods and services nation wide… and most hurt the people at the bottom of the economic ladder… democrats want to raise taxes… on businesses… that increases the cost of goods and services and in effect prices the poor out of the marketplace… forcing them onto the welfare roles… democrats see this as a good thing… because they feel that it will mean more democrat votes… the result is a continual erosion of the middle class from the bottom and a decline in the standard of living for everyone… a kind of…. trickle down poverty… the number one employer in America is Wal-Mart… number two is Kelly temporary services… what does that tell you about our future?

I thought libertarians believed in do no harm? How is allowing people to steal the wealth of others not harmful? It doesn’t matter who does it – the state or feds – it still harms those who get off their collective butts to support themselves. Not to mention the fact that it harms those it pretends to help. I know this because I grew up on welfare. Is it easy to “pull yourself up by the bootstraps”? NO – in fact it is a lot harder than people imagine but the process gives people like me more than just the ability to support ourselves – we gain self respect, knowledge, compassion, and a sense of self that is priceless. Understand that harm comes in many forms not just monetary and that sometimes helping isn’t quite as helpful as you might think.

Voters don’t want federalism. They instinctively understand that redistribution requires an as wide as possible net of coercion, and federalism defeats that, by allowing those who are slated ” to give according to ability” to escape to other states.

Voters will cling on to their hope that someone more intelligent, someone more competent, or simply someone harder working, will wake up every morning and leave his warm bed, his family, his garden, drive past the golf course, past his cabin by the lake, past his bird watching nature group, past the morning tai-chi class in the park… Ti go hole himself/herself inside an office and work half his/her day for the bene fit of distant others. AND, THE MOST IMPORTANT, work with enough residual enthusiasm so that he/she and the dozens of unconditionally supported unknowns can outcompete the four billion souls of the emerging world, and so that the American voter-lemming middle class can retain its top 10% worldwide prosperity standing.

Again, for insight into your future, dear Americans, look at Europe: Well into the final chapters of their decline, most Europeans don’t want federalism. They want an ever stronger Brussels to impose uniformity and leave no escape for those ever few remaining that must produce according to ability for the whole. As a matter if fact, the more they decline the more they cling to centralization, harmonization and homogenization as their last hope to cordon in the last few motivated people remaining. Even as national units the more productive nations of Europe (“more productive” on a European scale that is, ie. if one can indeed brag about a 2% annual growth trendline) are now becoming a minority. And the wallets of the ever fewer harder working amongst Europeans will be voted away by the majoritarian masses. As Hillary Clinton would say: “That is their village, participation is mandatory”.

This is the world of HopNChange that American voter-lemmings have now irreversibly chosen to follow.

The four billion emerging souls of the developing world, who are on the cusp of hope to buy their first car and first house ever, have neither the desire nor the patience to see how the developed world’s experiment with pitchfork-democracy and socialism ends. They will take no prisoners amongst the self destructive single billion once privileged voter-lemmings of the western world.

We currently have dependent society that has developed over the last 80 years. Benefits have climbed to +200% of the poverty line in an attempt to “help the poor and feed the starving children”. In the process, we have trapped many in poverty with mal-incentives not to work.

Doesn’t it make sense to replace the current tax code with poverty level support for all (replacing standard deductions and all tax deductions), and then adding a flat tax of 25%? That way everyone keeps 75% of what they earn, while effective tax rates go from negative to a maximum 25%.

This basic support would be adjusted for inflation and growth in population for a “real” annual increase of 1%, allowing us to grow out of deficits with any GDP growth above 1%.

It’s time to reverse the last 80 years and begin growing out of our dependency.

So-called libertarians supporting such a blatant socialist program – what have we come to? The problem is that it’s so blatantly non-libertarian and just plays in to the hands of the statists. Anybody believe that this program wouldn’t grow ever bigger until the whole thing collapses? Hmmm, maybe that’s the goal.

I understand the struggle between the desire to adhere to principle and the desire to make some kind of incremental improvements in the context of our current political environment. I just can’t stomach such socialist nonsense.